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 ANNEXC





MINIMUM WORK COMMITMENT


WORK PROGRAMME AND BUDGET FOR


FIRM AND CONTINGENT “AGREEMENT AREA"





I. Firm and Contingent Agreement Areas








The Agreement Area comprises the Erbil Geological structure (the “Firm


Agreement Area" (FAA)) and the Demir Dagh Geological structure (the


"Contingent Agreement Area" (CAA)) all as defined in Annex A.





If Contractor, after drilling two wells under the Production Sharing


Agreement dated 25 June 2004 in respect of die Dihok .Area port ot the


Dihok Governorate (the "Dihok PSA") and one well in the FAA under this


Agreement, has not made a Commercial Discovery under the Dihok PSA


or this Agreement, then the following shall apply.


If the Contractor gives a notice to the Government prior to the end of the


First Phase to extend the Agreement Area the Contractor shall drill the


exploration well and acquire the seismic on the CAA forming part of UK-


Work Programme (Minimum Commitment) in III-4a). and the Agreement


Area shall for all purposes be deemed to be the FAA and the CAA and the


Work Programme in IIl4a) and the Financial Commitment in IH-tb) shall





apply and replace in all respects the Work Programme and Financial


Commitment in II-(a) and II-(b) respectively.








II-(a) Work Programme for FAA (Minimum Commitment)





The FAA has three Exploration phases with relinquishments alter I'1 and


2"J phase. There will he 1004 relinquishment after 3"' phase unless a


Development Area is defined.





Work Programme (Minimum Commitment) for FAA:





Fxploration Phase Period Seismic Exploration Relinquishment


(months) Acquisition Drilling (niter phase comph)


First Phase *) 48 50 km 21» I well 25%_


Second Phase 36 (optional) I well 2y,


Third Phase 36 (optional) well 1004





*) Contractor will carry out a typical geological field study as part of First


Phase commitment.























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Il4b) Financial Commitment for FAA (.Minimum Commitment!











Unit rate assumptions:





• Seismic - 2D: S20.(XXVkm


• Seismic - 3D: S>0.(XXYkni2


• Exploration w ell: S2.0 mill (exclusive of testing!





Summary of Minimum Financial Commitment:





exploration Phase Period


(Months) Financial





Commitment


First Phase 48 S3.0 mill


Secood Phase 36_ S2.0 mill


Third Phase 36 S2.0 mill


Total S7.0 mill











III-(a) Work Programme for FAA and CAA (Minimum Commitment >





The FAA and the CAA has three Exploration phases with relinquishments





after 1“ and 2"1 phase. There will be 100*5 relinquishment after 3*J phase


unless a Dev elopment Area is defined.





Work Programme (Minimum Commitment) for FAA and CAA





Exploration Phase Period Exploration


(mounts) Acquisition Drilling (after*phase compL)


First Phase •) ••) 48 70 km 2D 2 wells 25*5


•••)


Second Phase 36 (optional l 1 well 25*5





l lmd Phase 36 (optional! 1 well 100*5





•> Contractor will cam out a tvpical geological field study as part of First


Phase commitment.


First Phase Minimum Commitment includes all Minimum Commitment


work carried out under ll-(al in respect of the FAA and CAA.


" *»If Contractor has not been able to drill the additional commitment well in


the CAA and any appraisal wells necessary to define j Development .Area


prior to the expiry of the First Phase, then Contractor may request the


Government to extend the First Phase to allow Contractor to drill such


commitment well and appraisal wells and/or to relieve the Contractor from the


obligation to relinquish any part of the FAA ami the CAA ai the end of the





First Phase.

















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Ill-lb) Financial Commitment for FAA and CAA (Minimum Commitment)











L'nil rate assumptions;








• Seismic - 2D; $20.(XXVkm


• Seismic - 3D: S50.00(Vkm2


• Exploration \scll S2.0 mill (exclusis e of testing)











Summary of Minimum Financial Commitment:








Exploration lliuse Period Minimum





(Months) Financial


Commitment


"48


First Phase *) $5.4 mill





Second Phase 36 $2.0 mill


rinrd Phase 36 $2.0 mill


Total $9.4 mill











*) First Phase Minimum Financial Commitment includes all expenditure


expended and forming part of Minimum Financial Commitment in I III*) in


respect of the FAA.


































































































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